Funds Management and Other Investment Services in New Zealand - Industry Market Research Report

Nothing personal: Competition intensifies as legislators give robo-advice the green light

Funds management services are declining. Uncertainty after the COVID-19 pandemic is discouraging investors from using fund managers' products and services. The emergence of robo-advisory platforms is also reducing revenue for fund managers. Despite the pandemic, strong domestic sharemarket performance has bolstered both the value of managed funds and sharemarket activity. The increasing size of the KiwiSaver scheme and its significance to the financial system are providing an additional channel for funds and other investment management growth. However, funds management revenue is expected to decline 2.5% in 2023-24, dropping to an estimated $4.4 billion as economic activity continues to recover from significant volatility in the domestic and global financial markets as a result of COVID-19. A rise in the cash rate and volatility in residential housing markets is weighing on investor confidence and constraining funds management services' performance. COVID-19 and the subsequent financial market volatility also prompted some investors to transfer from growth funds to conservative funds. This constrained the level of funds under management (FUM). Overall, funds management and other investment services' revenue has dropped at an annualised 1.0% over the five years through 2023-24.

Operators provide funds management services, financial planning, mortgage broking, nominee services, trustee services and custodial services. They also operate stock exchanges, provide share registry services and administer credit cards. Operators typically generate income on a commission or fee basis.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.